In a “Works for Me” style, we are going to be sharing what our families do for budgeting. I know for us, this has been quite an evolving process since we have been married. We have finally settled on a style that (mostly) works well for us.
– Budget for every dollar coming in– We have noticed that when we don’t have a specified purpose for all of our money, it gets spent anyway. So, we designate categories for it all. Pretty much any excess goes into the savings category.
–Make sure you are realistic– When we were first married, we didn’t have a budget items for clothes… or books… or… :) Somehow we managed to get these things and I’m not sure where the money came from. We weren’t very disciplined budgeters in those days and we just spent the excess on what we wanted. Now we make sure we have budget for all the types of things that we will spend on. We have a budget (no matter how small) for home projects, clothes, gifts, home decor, birthdays, Christmas, etc. We have also found that it is helpful when first budgeting to just figure out what you are already spending and budget realistically instead of trying to cut a lot of costs and learn how to use a budget simultaneously.
–Use envelopes when needed– There are some categories that we don’t save for consistently unless we use envelopes. These are the once yearly type expenses. The main two that come to mind are “Car Repairs” and “Christmas Budget.” Like I mentioned before, if we leave these as excess in the bank account, it tends to get spent and then we don’t have money for these things.